The price is right as organic food shows its value to shoppers

When times were good, a few extra pence seemed like a small price to pay for vegetables covered in mud rather than plastic. But then the recession hit and the organic movement endured its toughest trading climate in 20 years. After a decade of steady growth, the industry saw sales decline by 13 per cent last year.

Some blamed the supermarkets for removing organic products from the shelves to make room for bargain basement replacements, but with appetites waning, producers were left with no choice. If they were to survive, prices had to be reduced and profits cut.

The result has been organic foods priced closer to their conventional counterparts than ever before.

In fact, according to new data from the Organic Trade Board, staple organic foods like bread, milk and coffee are now cheaper.

The problem is that the message is struggling to get out and many still class organic as a luxury brand.

"Organic products were first available to the public through farmers' markets and speciality food shops, which lent the word 'organic' a tag of inaccessibility and luxury," says Finn Cottle of the Soil Association, whose 2010 Organic Market Report analysed key trends in spending habits.

"But that's not the case anymore. More than 75 per cent of organic goods are sold through supermarkets, meaning everyone now has access to organic products.

"Last year, a third of all organic purchases were made by manual and casual workers, pensioners, students and people on benefits and that's not a new trend.

"It's a complete myth about organic being a luxury product, the data just doesn't support it."

Producers are now hoping to follow the lead of the organic dairy sector. While sales of organic products overall took a dip last year, during the same period, sales of organic milk increased by one per cent. The rise was largely down to some savvy marketing, which actively promoted the fact that organic milk costs just 1 more per week for the average family.

"Organic milk is only 15 per cent more expensive than non-organic milk, which means it's only a small cost to a family budget," says Huw Bowles, of the UK's largest organic milk co-operative OMSCo (Organic Milk Suppliers Co-operative). "Advertising campaigns can help spur business, he says, but so does nudging customers in certain directions through coupons and in-store offers.

"We need to be clever at prompting people to try new products. People will buy organic carrots week in, week out – but not milk, and vice versa.

"Consumers do generally get the organic 'message' that it's better for the environment. Now it's about breaking the habit of current purchasing choices.

"This isn't a time to be shy about it either. In the past, you could say something was organic and people just bought it because they wanted to be that type of person.

"Now the weekly shop is under greater scrutiny, you have to demonstrate what value consumers get from buying organic."

The Organic Trade Board and Soil Association hope to increase sales this year with marketing campaigns similar to the one used for organic milk and get more consumers buying organic foods all across the board again, but not all prices can be slashed.

Meat is much more expensive to produce organically and stringent production and inspection rules means its harder to pass on savings to consumers.

"Because organic farming is less intensive and can have a longer production cycle, organic farmers will often see a reduction in output per acre of their farms compared with their intensive, non-organic neighbours," says Bob Kennard of Graig Producers, an organic livestock marketing group. "In order to earn a similar profit from their farm as a whole, the organic farmer will generally need to earn more for each

ton of crop or each animal which he produces."

Over time, the Organic Trade Board expects price differences between conventional and organic goods to continue to decrease in some sectors as nitrogen fertilisers, used by conventional farms, increase in price, but the future remains very much in the hands of the producers.

"The last 18 months have been difficult," says Cottle. "But it is up to everyone involved in the industry to get out there and make sure that the benefits of shopping organically come across loud and clear."

THE PRICE COMPARISON

n Sainsbury's So Organic wholemeal bread, 800g, 99p; Warburtons wholemeal bread, 800g, 99p.

n Rachel's Organic Milk, 2L, 1.69; Cravendale Milk, 2L, 1.69.

n Clipper Everyday organic tea x 80 teabags, 2.29; Yorkshire Tea x 80 teabags, 2.29.

n Kallo Organic Cornflakes, 375g, 1.39; Kellogg's Cornflakes, 500g, 1.93.

n Sainsbury's Medium So Organic Cheddar, 200g, 2.09; Cathedral City, 200g, 1.94.

Source: Sainsbury Online